The Heckscher-Ohlin-Vanek Theorem and International Factor Price Differences

Avik Chakrabarti ()

Open Economies Review, 2005, vol. 16, issue 4, pages 407-412

Abstract: This paper demonstrates the importance of accounting for absorption of inputs in a model of factor-augmenting international productivity differences when examining the consistency of international factor price differences with the Heckscher-Ohlin-Vanek (HOV) theorem. It is shown that the absence of such accounting has non-trivial implications in the form of introducing a bias in the calculation of productivity parameters based on the HOV theorem. Copyright Springer Science + Business Media, Inc. 2005

Keywords: Heckscher-Ohlin-Vanek theorem; factor underutilization; trade in intermediates (search for similar items in EconPapers)
Date: 2005
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